A bomb explosion has ripped though a crowded cafeteria in Jerusalem's Hebrew University, killing at least seven people, including three Americans, and wounding more than 80.

Witnesses said it was a powerful blast. They described a devastating scene of bodies, body parts, blood, and clothing scattered throughout the cafeteria.

Israeli police quickly characterized the explosion as a terrorist attack, saying the bomb was likely placed in a handbag.

The militant group Hamas claimed responsibility for the blast. A senior Hamas official, Abdulaziz Rantisi, said on Israeli TV that the bombing was in retaliation for last week's Israeli air strike on Gaza City that killed the head of the Hamas military wing and 14 other people, including nine children. He warned more attacks would follow.

"The previous [Israeli] attack was against the children, against women, against civilians," he said. "So if they [Israelis] are now attacking civilians, then they have to think they are going to drink from the same poison."

In an unusually strongly-worded statement, the Palestinian Authority referred to the bombing as a terrorist act. It condemned the attack, saying it was beyond the bounds of humanity and morality. The statement said the attack would further damage the Palestinian cause.

Palestinian leader Yasser Arafat condemned the bombing and said he regrets any loss of life on both sides. He said he would continue efforts to stop the violence.

Zalman Shoval, a foreign policy advisor to Prime Minister Ariel Sharon dismissed the Palestinian condemnation. "In fact and in practice the Palestinian Authority has not done anything either to stop terrorist acts," he said. "Actually they may still be contributing to them. What happened today on Mount Scopus shows that Palestinian not just deliberately target young people, children, women. I think it's especially revolting to put a bomb in a place of learning."

Even though university classes are not in session, students are taking exams and the cafeteria was said to be crowded at the time of the explosion.

The Hebrew University campus is located on Mount Scopus, near traditionally Arab East Jerusalem. Most of its student body is Jewish, but it does include Arab students as well.

Wednesday's blast follows a suicide bombing in Jerusalem one day earlier, when a young Palestinian blew himself up at a fast food restaurant in the city's commercial center, wounding seven Israelis, none of them seriously.

Israeli authorities have said they are on alert for as many as 60 terrorist threats. Islamic and Palestinian militant groups have threatened stepped up attacks against Israeli targets after last week's Israeli air strike in Gaza.